Nov 29, 2020

Article By : Egil Juliussen Software has grown in importance in the auto industry and its prominence continues to increase, thus prompting car OEMs to inevitably rely on the use of OTA software updates. Software has grown in importance in the auto industry for several decades and its prominence continues to increase, thus prompting car OEMs to inevitably rely on the use of over-the-air (OTA) software updates. Software used in automotive has many unique features — both good and bad. The best feature is the low manufacturing cost, since it’s primarily driven by royalty fees. A drawback is the high development cost for complex software. The worst part is that all complex software has software bugs that require fixing after the software has been deployed in products in the field. Even with extensive software testing during the development phase, there will be undiscovered flaws in all complex programs that will need fixing during the typical 15-year lifetime of automotive software. The result is that industries with complicated software-based products eventually start using over-the-air (OTA) software updates to lower cost and/or to improve the software functionality. The PC industry has used OTA for over two decade and the smartphone industry for over a decade. The auto industry is well on its way to follow suit and experience the many advantages of remote software updates. The table below shows the key advantages of software OTA for the auto industry. The following discussion gives some perspectives on the value for different participants and users of OTA. For the OTA software suppliers, supplying products to auto manufacturers is obviously a revenue opportunity. There are several revenue segments: a fee for tailoring the software to each car model, software royalty per car, OTA software maintenance, and fees for other products such as cyber-security and OTA data analytics. The OTA software supplier may provide its products via a Tier 1 supplier, or the Tier 1 supplier could be an OTA provider. Click the table above to enlarge. (Source: Egil Juliussen) The auto OEM primarily sees OTA software delivery as a cost-saving technology that can be realized during recall events and during the auto manufacturing phase. Lower costs to get notifications to customers also has potential value. Time savings is another advantage as the OTA update can happen more quickly than dealer visits. There are also future revenue opportunities, as functional and feature updates can be done via software OTA upgrades. Only a portion of the car owners will be willing to pay for such improvements. The value to the auto owner is cost and time savings from avoiding trips to the dealers to do software updates. Quicker software fixes also have value, especially when it is a safety function that is fixed. Finally, society in general, will receive value from OTA software updates. Currently, dealer-based software updates have a completion rate around 70%. This means there are millions of unsafe cars on the road that have not received required software updates. OTA software updates are expected to have much higher completion rates — probably above 95%. OTA software updates are at the cusp of a growth stage and will proliferate in the next five years. IHS Markit has a database that tracks OTA availability by OEMs and their auto models. IHS Markit data shows that 30% of vehicles sold in 2020 will have OTA capability. For 2025 OTA will grow to 79% of vehicles sold worldwide. The next table is an overview of key OTA players with some perspectives on each company and their strategies. It is notable how many OTA acquisitions have happened among the companies. Future acquisitions are likely. Click the table to enlarge. (Source: Egil Juliussen) Harman Harman is the clear leader. In 2015 Harman acquired Redbend, which at that time was a leader in smartphone OTA and with a strong position in the emerging auto OTA segment. Harman also acquired Symphony Teleca in 2015, which also had OTA and strong cloud capabilities. Harman has leveraged these capabilities into extensive OTA services with OTA clients and cloud-based SaaS. Harman’s OTA leadership is so strong that other participants are using a variety of strategies to compete. QNX-BlackBerry QNX is a leading supplier of automotive operating systems and have been successful in providing OTA solutions when the OEM use the QNX OS. BlackBerry also has an IoT platform with extensive OTA deployment success that are used in the auto industry. QNX is a leading real-time OS in the auto industry and have safety ratings that allow usage in all automotive ECUs. Wind River Wind River entered the OTA business when it acquired Arynga while it was an Intel subsidiary. Arynga was an OTA startup with strong telecom OTA experience. Arynga OTA technology supports hot swapping, so that software can be updated without stopping a system. The Wind River OTA platform is called Edge Sync. Wind River is a supplier of multiple OS products for the auto industry such as VxWorks, Wind River Linux, AUTOSAR Adaptive and its Helix virtualization platform. Airbiquity Airbiquity is focused on connected services for the automotive industry including its OTAmatic platform for software updates and software life cycle management. OTAmatic is multi-ECU OTA solution and data management that is focused on the auto industry. Both AWS and Microsoft Azure offer the OTAmatic cloud platform or it can be managed on the auto OEMs’ servers. Toyota and Denso invested $15 million in Airbiquity in 2019 and they will collaborate on OTA and software management. Wind River and Airbiquity announced they will cooperate on an open and flexible OTA solution for the automotive industry. Excelfore Excelfore provides a software update platform called eSync OTA Pipeline. This OTA platform is used by a variety of edge devices but is focused on the automotive industry. The eSync platform provides extensive cloud services and OTA software clients in the car. The eSync clients can also supply diagnostics and related data for fleet analysis and management. The eSync OTA Pipeline is available via Microsoft Azure. Excelfore has formed the eSync Alliance to establish compatibilities among devices with OTA capabilities. Currently the eSync Alliance has 11 members including Alps/Alpine, DSA, Excelfore, Faurecia, Hella, Mobica, Molex and ZF. Many auto OEMs and Tier 1 suppliers are using the eSync OTA platforms. Aftermarket infotainment suppliers are also using eSync products for OTA updates. Aurora Labs Aurora Labs is an OTA software startup that was founded in 2016 and currently has VC funding of $34 million. It has developed several innovative OTA technologies including a patent portfolio. Aurora Lab is positioning its product as “self-healing” software solutions that can future-proofing the connected car. Aurora Lab’s Line-of-Code Behavior technology provide the foundation for OTA and software management solutions. The technology is based on machine learning algorithms that address all stages of software from the development or create phase to the software use phase in the car. The technology can be used for much more than OTA and is promising for developing more reliable code with fewer bugs. Essentially, Aurora Lab OTA functionality is built-in during the software development phase, which makes it much easier and more cost-effective to manage OTA activities during the typical 15-year software use phase. This strategy is very different from the technology of other OTA suppliers that provide aftermarket software update solutions—the OTA solutions are created after the software have been developed. The drawback for Aurora Lab is that it takes a long time to get deployment of their OTA solutions because the Line-of-Code Behavior technology has to be used during the OEM or Tier 1’s development of the software platforms. It is probably taking 3-5 years until Aurora Labs will have volume deployment of its OTA solutions on the road. The long-term advantages look promising for the software health of the emerging software-defined car. Sibros Sibros is an OTA software startup that was founded in 2018 and currently has VC funding of $15 million. The founders have experience from Tesla and Uber. Sibros offers its Deep Connectivity Platform for whole-vehicle OTA updates and data collection functionality. The in-vehicle platforms include the Deep Updater, Deep Logger, Armor cybersecurity and a bootloader. These products form the building blocks for developing connected car solution. The Deep Connectivity Platform also includes cloud-based services to manage SaaS apps from Sibros and customers. The Sibros platform provides multi-function capabilities with OTA being a core function. Other apps include remote diagnostics/prognostics, fleet management and analytics. The platform can also provide data for usage-based insurance (UBI), parking and similar connected car applications. Sibros already has multiple customers in several countries and has been shipping its products since July 2019. Sibros has an innovative strategy that uses a connected vehicle platform that spans multiple connectivity sectors and OTA is just one segment. Tier 1 Suppliers Several of the Tier 1 suppliers are providing OTA capabilities usually via telematics systems and/or IoT platforms. Many of the Tier 1 suppliers are also using the OTA products from the OTA software specialists listed above. Aptiv acquired Movimento in 2017 (while part of Delphi). Movimento has extensive experience in re-flashing ECUs via a Wi-Fi based devices connected to OBDII ports. Movimento technology has been used by many OEMs and Tier 1 suppliers. Movimento technology is now included in the Aptiv Connect Platform. Bosch is providing OTA capabilities via its IoT Suite platform. The OTA capabilities are included in the Bosch IoT Rollouts platform. The IoT Suite capability is also available via Amazon Web Services (AWS). Continental is providing OTA via its telematics systems. Continental has an agreement with Inmarsat, which is a leader in global satellite communications and can be used for OTA software updates. Lear is also using its telematics systems to provide OTA. Lear acquired OTA intellectual properties and key employees from Autonet Mobile in 2015. Lear introduced OTA functionality with its ConneexUs products in 2017. HERE is primarily using OTA for map updates. HERE acquired Advanced Telematics Systems (ATS) in 2018. ATS is focused on open source software solutions for OTA updates in the automotive industry. ATS is actively supporting open source OTA software to multiple organizations such as GENIVI, Auto Grade Linux and Uptane. Uptane is framework for safe OTA updates. Where is OTA going? There are several important OTA trends emerging — especially new regulations, and the OTA needs of the leading auto OEMs. The update of the whole car including all ECUs is also becoming a key goal. New global regulations, UNECE WP.29 require traceable and secure software updates for the hundreds of millions of lines of automotive software code in future vehicles. The adoption of the regulations will require auto manufacturers to have a deep understanding of software behavior in order to obtain the data and evidence required for certification. The regulation has the potential of greatly changing the OTA market over the next 5-10 years. OTA capabilities are becoming a core functionality that auto OEMs needs to manage the software-defined cars. This means that most of the OEMs want more control of their OTA and related software platforms. These trends will open new opportunities and will require innovation from OTA companies. In some ways these trends create market discontinuities that give innovative companies a better chance to compete with the established OTA players. I think both Aurora Labs and Sibros have unique OTA technologies that many auto OEMs can leverage as part of their OTA strategy. More OTA innovation is expected especially as OTA and cybersecurity functionality become required for all connected cars on the road. The connected car is here to stay and will grow tremendously in the next decade in all regions. Software complexity continues to grow and OTA software updates will be required to fix software bugs economically in hundreds of millions of cars in use. OTA will become a valuable strategy to save the OEMs billions of dollars in cost reductions from remote software updates. Additionally, functional software updates will create a new revenue stream that will more than pay for the deployment cost of OTA functionality. Essentially, auto OEMs want to extend OTA updates to the entire car for quality, safety and security reasons. And to enhance the consumer experiences with new features and functions throughout the lifetime of the car.